Brazil taxes postponed

Condecine rules opposed, Ancine startup causes delay

RIO DE JANEIRO — The Brazilian government has postponed the controversial package of new taxes and fees on foreign pay TV programmers and theatrical and programming distributors.

Local and international media companies, pay TV programmers, U.S. studios and other groups continue to lobby for changes in the package, and the delay gives hope that the taxes may not be quite so harsh. Motion Picture Assn. topper Jack Valenti and U.S. trade officials in Washington have been involved in negotiations.

The package, known as Condecine, was announced in September and was due to take effect Tuesday. It is a part of measures unveiled in a presidential decree that promote local film production, distribution and exhibition.

The postponement is due to delays in the startup of the National Cinema Agency (Ancine), which will regulate the Brazilian film sector and collect the taxes and fees, and not to outside pressure, according to a spokeswoman for Ancine president Gustavo Dahl.

The original decree calls for an 11% tax on remittances from subsidiary operations (applicable to any type of sale and to the distribution of all audiovisual materials) to foreign headquarters. This measure takes effect in March. Fees already levied on foreign films and programming will not increase until June.

Film distributors will have to pay 3,000 reals (about $1,200) per film per window (theatrical, homevideo and broadcast), up from $600. Pay TV programmers will have to pay $800 per feature film and $180 per TV episode.

Feevees hopeful

The pay TV programmers claim the charges would cripple their channel operations, but they are hopeful the fee structure will be amended.